Declines in hot-rolled coil inventories accelerate as tax cuts bolster demand

SHANGHAI, Mar 22 (SMM) – Inventories of hot-rolled coil (HRC) across social warehouses and steel mills in China fell faster in the sixth week after the Chinese New Year holiday as purchases improved ahead of the value-added tax cut on April 1

Such improving fundamentals are set to support HRC prices.

SMM data showed overall HRC inventories stood at 3.5 million mt as of Thursday March 21, down 4% from a week ago and 7% from the same period after 2018’s CNY break.

Overall stocks have declined for four consecutive weeks and lost 1.1% in the week ended March 14.

This week, HRC stocks across social warehouses dropped for a third week to stand at 2.53 million mt as of Thursday, down 8.4% from a lunar year ago.

Stocks across mills lost 4% to 976,300 mt after expanding 1.9% in the previous week. On a lunar year basis, HRC in-plant inventories decreased by 3%.